The Lasting Impact of the Repeal of the Part B Therapy Cap

Posted by Keith Carson

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The Balanced Budget Act of 1997 established an annual per-beneficiary Medicare spending limit, or therapy cap, for physical, occupational and speech therapy services covered under Medicare Part B.  Simply stated, the therapy cap was established in an effort to reduce Medicare spending on therapy services.  An exception process was put into place in 2006 which allowed for additional therapy services to be provided that were “medically necessary”, but the therapy cap was still preventing people from receiving the therapy services they needed.  As you may be aware, on February 9th, 2018, President Trump signed the Bipartisan Budget Act of 2018 which repealed the cap.  This means the year-to-year process of waiting to see if we would have an exceptions process or manual medical review is gone. We now have a permanent policy for Medicare Part B payment!

How Will This Affect You

This is amazing news for your residents that require skilled therapy services.  Your “Jimmo skilled maintenance” patients will not be limited in the care they need, and providers and patients will not feel that they have to “ration” necessary services because of an arbitrary dollar amount.  Our facility partners can partner with their therapy teams to help with quality measures that drive 5-star performance for our most vulnerable long term care population, and provide the quality outcomes that make for happy and healthy residents.

What Can You Do

  1. There is not a limit or a cap on therapy services, but there does remain a step in the plan of care where the therapist needs to verify that the services are skilled.  Your therapy provider will need to continue to track Medicare Part B dollars spent and apply the KX modifier to claims for services provided over a dollar amount to indicate that services are medically necessary. For 2018, this amount is $2,010 for PT and ST combined and $2,010 for OT.
  2. Be on the lookout for targeted manual medical reviews (MMR) which will continue with a new threshold of $3,000 for PT/ST and $3,000 for OT until 2028.  CMS contractors will be primarily looking at and requesting medical records from providers with billing abnormalities, outliers, and a history of billing errors.
  3. Lastly, make sure you revise your ABN process if you were issuing “blanket” ABN’s for patients that needed services above the therapy cap.

One More Thing

As some of you may have heard, there was a “pay for” included at the last minute in this legislation.  It came as a surprise to all of us that had been advocating for the cap to be repealed. 

Here is what we know . . .

  • By January 1, 2019 a therapy assistant modifier will be established
  • On January 1, 2020 the therapy assistant modifier will need to be used on claims
  • On January 1, 2022 services provided by therapy assistants will be reimbursed at 85%

The good news is that the January 1, 2022 implementation date for the PTA/OTA payment cut allows time for providers to advocate against this change as CMS develops their proposed rules.  Therapy Specialists will be advocating at the state and national level, and will encourage our partners to join us when the time comes.

Speaking of changes, one more we anticipate coming down the pike is RCS-1, the new proposed payment system for skilled nursing facilities.  You can learn more about what we believe rehab companies should be doing to prepare now for RCS-1 by viewing our blog entry titled "3 Things Your Rehab Provider Should be Doing Now to Prepare for a World Where Therapy Minutes No Longer Drive Your Reimbursement".  

Author Bio:

Keith Carson is often “the first handshake” for Therapy Specialists’ new business partners. Responsible for finding, nurturing and growing strategic partnerships in the market, Keith is the point of contact for facilities considering values-driven contract therapy options. His background in medical and healthcare sales management includes tenures with start-ups and multi-million dollar companies that put him on the frontline with the likes of physical therapists, neurosurgeons and long term care facility managers. He calls on his vast experience and track record to strengthen and grow our business.

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